Budget hoteliers in Malaysia apprehensive about tourism tax

Published on : Thursday, June 15, 2017

Malaysia apprehensive about tourism taxBudget hotel operators in Malaysia said they are not against the introduction of a nationwide tourism tax from next month, which the government has said will ultimately benefit the local industry.


However, Malaysian Budget Hotel Association (Mybha) president Sri Ganesh Michael is worried about the timing of the tax rollout, and stiff competition from Airbnb, the world’s largest home-sharing network.


To quote Ganesh, “We are already struggling with low room occupancy… so it’s a bad time to be introducing the new tax and the tourism industry is huge, why only expect the hoteliers to collect?”


He said over three year, budget hoteliers have been facing increasing competition when the Airbnb service first made its local appearance. “And the other thing is those [companies] like Airbnb, they don’t have to pay tax and this will make people [prefer them over us],” Sri Ganesh said.


He said that budget hotels were also struggling to fill up rooms as tourist traffic were said to have dropped, primarily due to the Goods and Services Tax (GST).


Ganesh said that Mybha members were not entirely opposed to the idea of a tourism tax, but it would have been more acceptable if the government imposed the levy only on foreign tourists, or, alternatively, charge an exit tax.


Many countries in the world collect tourism tax, though the system and rates vary according to individual nations.


The new federal tourism tax is also meant to be redistributed for the national tourism industry through what Tourism Minister Datuk Seri Nazri Aziz described as promotions and marketing blitz, but industry players are sceptical.


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